Russia “lives well” with a lot of gas money despite the war in Ukraine

Russian gas transit pipeline through Ukraine

Russia According to RT, so far, the batches Russian gas unaffected by the crisis involving Ukraine, and even increased from pre-conflict levels. However, supply is under increasing pressure as importers inside and outside the EU are pushing for stronger action on Russian energy purchases, looking for alternative suppliers around the world.

While around the world, “energy security” causes debates about diversifying supplies and reducing dependence on bad actors, but for Sergiy Makogon, their meaning is more correct: How to keep Ukraine’s nearly 40,000km network of natural gas pipelines crisscrossed during wartime.

On the day CBC spoke with Makogon last week, the CEO of Ukraine’s Gas Transmission Systems was busy rerouting a pipeline near the northern city of Kharkiv that had just been hit by a missile.

Makogon’s team is responsible for the high-pressure pipelines that transport 40 billion cubic meters of natural gas each year to Europe.

This network is one link in a complex interdependent system that keeps Europe bright and provides vital revenue to Russia. Experts say the transit network is facing its biggest threat since the West began importing large amounts of gas from the Soviet Union in the late 1980s.

“That system was created,” said Margarita Balmaceda, a professor of diplomacy and international relations at Seton Hall University in New Jersey and the author of several books on Russian influence in the energy sector. with great pride from both sides. Engineers, planners, managers were really excited to create a system… that could eventually withstand all political tensions over time, able to overcome the Iron Curtain.”

However, Ms. Balmaceda said, the Russian attack on Ukraine risks breaking that precedent as Europe seeks to scale back its reliance on Russian gas and Russia threatens to punish unfriendly countries by paying for gas in rubles.

While Europe is concerned about gas supplies, international pipelines transiting Ukraine have also been affected by the conflict.

Makogon said that since Russia launched a military operation in Ukraine on February 24, shelling has damaged a number of pipelines, compressed air stations and distribution points. “Most of the damage is related to low-pressure pipelines due to very heavy fighting in cities or near cities,” Makogon said.

In an email to CBC, Russian energy group Gazprom said it was supplying gas for transit through Ukraine as usual and “in line with the requirements of European consumers”.

“Energy Defense”

Ukraine is one of four main pipeline corridors through which Russian gas flows to northern, central and southern Europe, together providing about 45% of the gas imported by the EU.

Ukraine receives about $100 million a month for gas transit to Europe. More importantly, Makogon said, it ensures Russia can earn about $900 million a day from gas sales to Europe.

“We call it our kind of energy defense. We believe that, as long as we have a transit pipeline, Russia will not intentionally destroy our infrastructure and we will be able to supply gas to the locals.”

Finally, Ukraine wants to see Europe put a complete embargo on Russian oil and gas, but they found that gradual elimination was more likely, Makogon said. “Unfortunately, we understand that Europe is too dependent on Russian gas.”

Russia, for its part, is in no hurry to cut off the revenue that Europe’s energy needs generate, says Professor Balmaceda. Last year, Russia made 99 billion euros ($107 billion) from oil and gas sales to the EU.

According to Professor Balmaceda, there have been several times where Russia has used supply disruptions as leverage: In 2006 and 2009 during a price dispute with Ukraine and last fall, when the country reduced gas supplies to cause pressure on European partners to promote the Nord Stream 2 pipeline to Germany, which was suspended in February due to Russia’s recognition of breakaway republics in eastern Ukraine.

“They were really working on the idea of ​​being a reliable supplier,” said Ms. Balmaceda, who is also an associate at Harvard University’s Center for Russian and Eurasian Studies and Harvard Ukraine Research Institute. trust”.

In an email to CBC, Gazprom said it “continues to provide reliable gas exports to consumers”, but will obey Russian President Vladimir Putin’s orders to require “unfriendly” countries to pay money. buy Russian gas into the ruble account.

Russia expands gas supply

Whether Russia will cut off supplies to non-compliant buyers is unclear, but Carlos Torres Diaz, an analyst at Rystad Energy (an energy market research firm in Oslo) – says the move Redirecting gas to other markets will not be something Russia can do quickly and easily.

Russia has expanded gas export to China in recent years, but the existing pipeline does not connect to the West Siberian and Yamal gas fields, where European gas is located, so redirecting that supply will require the construction of new connections. , expansion projects – which are difficult to implement because of Russia sanctions due to the war in Ukraine.

“A lot of this infrastructure has been developed with Western companies like Exxon, but they are pulling out,” says Torres Diaz.

For its part, Europe took a step towards phasing out Russian energy last week by ban on coal imports from Russia starting in August, but doing the same for natural gas will be much harder, says Torres Diaz.